Macro Co. purchased land as a factory site for $600,000. Macro paid $60,000 to t

Question

Macro Co. purchased land as a factory site for $600,000. Macro paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,840 were paid for title investigation prior to the purchase of the land. Architect fee's were $31,200. Title insurance cost $2,400 (incurred when the land was purchased), and liability insurance during construction cost $2,600. Excavation cost to lay the foundation of the building is $10,440. The building contractor was paid $2,200,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000.

The cost of the building is $_________

Explanation / Answer

Macro Co. purchased land as a factory site for $600,000. Macro paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,840 were paid for title investigation prior to the purchase of the land. Architect fee's were $31,200. Title insurance cost $2,400 (incurred when the land was purchased), and liability insurance during construction cost $2,600. Excavation cost to lay the foundation of the building is $10,440. The building contractor was paid $2,200,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000.

The cost of the building is $

$6,000,000 + $60,000 – $5,400 + $3,480 + $2,400 + $6,400 = $6,066,880

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